Lee Morof's Real Estate Blog

When you buy southeast Michigan real estate in a subdivision, co-op or planned unit development, you may be subject to a host of rules and regulations as established by the Homeowners’ Association (HOA) governing that development. 

You’ve most likely heard of HOAs, but you may not know exactly how they operate and how they can impact you and your southeast Michigan real estate.  In this article, you’ll get information on some of the broader issues that you should be aware of when moving into a community governed by an HOA.

What is a Homeowners’ Association?  

It is a corporation formed by real estate developers to market, manage and sell homes and lots within a development.

Does the southeast Michigan real estate developer retain control of the HOA forever?  No.  After a predetermined number of homes or lots are sold, the control is turned over, first, to a handpicked group of homeowners.  Later in the process, elections are held once a year within the development to choose board members.

Can anyone be a board member?

As long as you’re a property owner in the development governed by the HOA, you can campaign for the position.  Elections are held once a year.  It is not a paid position; board members volunteer their time.

What is the primary function of the HOA?

The primary function of an HOA is to maintain the rules and restrictions that were put in place by the developers and to maintain the community’s common areas.

Common areas include streets, parking lots, parks or green areas, pools and buildings used by the owners like a clubhouse or fitness center.  If your southeast Michigan real estate is an attached condo unit, this would include the exterior of your unit as well.

Can I elect not to join the HOA?

No, HOA membership is written into the pros and cons of buying a home when the development is formed.  No matter how many times the property changes ownership, the HOA requirements remain with it. 

You’re also required to pay HOA fees, which are used to maintain the common areas.  If you do not stay current on the fees, the HOA can put an assessment lien on your southeast Michigan real estate.

Before buying into a development with an HOA, read and understand the CC&Rs.  Also, take the time to talk with some of the other homeowners in the development to find out how they feel about their HOA.

If you’re interested in buying southeast Michigan real estate, with or without an HOA, I can help.  Please give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Attorney  
Certified Distressed Property Expert
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Low home prices combined with low interest rates makes this a great time to purchase southeast Michigan real estate investment property.  One of the most popular real estate investments is rental property.  Investing in rental property can be profitable, if you pick properties that meet the following criteria:

1. Require minimal maintenance.  Southeast Michigan real estate with newer appliances, smaller yards and that have been well-maintained, are typically easier and less expensive to continue to maintain.
2. Attract long-term, well-paying renters.  Your goal is to get renters who will take good care of your southeast Michigan real estate, stay a long time and pay on time.  While lower-priced properties near colleges may be easy to rent, they typically attract students who tend to be loud, messy and short term renters.   On the other hand, rental properties that are in the highest price range may attract renters who are in jobs that require them to move frequently or who will quickly purchase homes of their own.
3. Located in highly-populated, low-crime areas.  Steer away from rural areas where there are fewer potential renters.  Look for homes in neighborhoods that have low crime rates and good school districts.  Neighborhoods near public transportation, grocery stores and shopping malls attract renters.
4. Zoned for renting.  Always check to be sure the property you intend to lease is approved to be rented by local zoning or home owners’ associations.
5. Priced properly.  Your purchase price must be low enough to allow you to set the rent within a range the local market will bear and that will earn a profit for you.  Be sure to take into consideration every expense of owning, maintaining and renting this property, when considering if you can turn a profit and have a positive cash flow from the start.

Interested in buying a rental property?  I can help.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Attorney  
Certified Distressed Property Expert
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Today’s turbulent southeast Michigan real estate market means the days of selling homes without any planning or preparation are a distant memory for most people. Don’t put all of your eggs in one basket, because there is tons of competition and buyers are not hunting southeast Michigan real estate in a hurry like they once were. To sell your house quickly, staging and well-thought-out marketing plans are now necessities — not luxuries.

Do you know how to best present your property? What are the most effective ways to get buyers in the door? Using the tips and techniques below, you can begin to emerge from your rabbit hole and quickly move on to your next home with as much money in your pocket as possible.

Selling techniques for Southeast Michigan homes:

• Price it Right – No amount of marketing or staging will help if your property is overpriced. For most people, it’s hard to look at their home objectively. Compare it to other southeast Michigan real estate properties for sale in your neighborhood, and take into account square footage, upgrades, location, and amenities, as well as, current market trends.
• Develop a Marketing Plan – You have to decide the best and most cost-effective way to get potential buyers in your house. Rarely is a newspaper ad or an Internet posting enough. Today’s competitive southeast Michigan real estate environment requires more aggressive techniques which includes everything from social media marketing to prompt follow-up chats with potentially interested buyers.
• Stage your Home – You want your home to appear its best every time a potential buyer comes to see it. If buyers see dirt and stains, they might begin to wonder about how diligently the rest of the property has been maintained. De-clutter and depersonalize. Turn on all your lights and open all the blinds to make your house appear as light and open as possible. For open houses, take the extra time to add fresh flowers, build a fire in the fireplace and have something baking in the oven.

Do you need egg-stra help preparing your southeast Michigan home for sale? I’d love to share my 30-Day Marketing Plan with you. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Attorney
Certified Distressed Property Expert
RE/MAX Showcase Homes
Birmingham, Michigan
Call: 248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Do you know how closing costs actually work? Or, how you’d use CMAs (comparative market analysis) to evaluate Southeast Michigan real estate in Oakland County? And, can you decipher all of the abbreviations and acronyms, such as FDR, lo dues and MLS.

Purchasing a home is frustrating enough without having to go through the frustration of decoding all the complicated speak and legalese. If you brush up with a real estate dictionary  before your home-buying search, you’ll gain valuable knowledge and save yourself a lot of time and headaches in the long run.

• Basic lingo every Southeast Michigan real estate buyer or seller should know …
  ARM – This stands for Adjustable-Rate Mortgage, which is a type of mortgage where the interest rate periodically adjusts.
• Closing costs – These are miscellaneous expenses buyers and sellers pay upon closing; they usually include brokerage commission, escrow taxes, recording fees, etc.
• CMA – This stands for Comparable Market Analysis, which is a report of recently sold, comparable homes in the same market as the home you’re selling.
• ERV – Estimated Rental Value 
• FDR – Formal Dining Room
• Fixture – Anything that is permanently attached to the home, such as door knobs, carpeting, light fixtures and landscaping
• FP – Fireplace
• HDW – Hard Wood Floors
• Lo dues – Dues paid to the homeowners association
• MLS – Multiple Listing Service, which is an organization that compiles multiple listings into one report and distributes it to all of their realty members.
• PSF – Per Square Foot
• Sale price – The actual price at which the property sells.

Don’t let the hectic housing market overwhelm you.  If you understand Southeast Michigan real estate lingo, you’ll be more knowledgeable and able to easily achieve your real estate goals.

If you have questions about any of these terms or want help achieving your real estate goals, call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Attorney  
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Are you a first-time home buyer?  There are a lot of things you’ll want to learn before making that first purchase.  Here are 9 tips to help you purchase the perfect Southeast Michigan real estate you’ll love and be prepared for additional costs you may not have considered:

1. Ask yourself if you’re ready. Are you financially ready to buy Southeast Michigan real estate?  Do you have a steady job and income?  Do you have money for the down payment?

2. Get pre-approved.  When you get pre-approved for a mortgage loan, your lender checks your credit and lets you know the amount of mortgage for which you qualify.  Having a pre-approved loan will put you at the top of the list when presenting an offer.

3. Identify closing costs. The cost of closing on the sale of your Southeast Michigan real estate shouldn’t be overlooked. Closing costs include origination fees, title and settlement fees, taxes and prepaid items such as homeowner’s insurance or homeowner’s association fees.

4. Calculate your total monthly housing cost.  Include taxes and homeowners insurance.  In some areas, what you’ll pay for your taxes and insurance escrow almost doubles your mortgage payment.

5. Include home maintenance expenses in your budget.  Maintaining your investment can be labor-intensive and expensive. Unexpected costs for new appliances, roof repairs and plumbing problems can drain your bank account.

6. Find a Bloomfield Hills home.  Identify the neighborhood, you want to live in.  Hire a full-time REALTOR® who specializes in that neighborhood to help you find and negotiate the purchase of the home.

7. Get a home inspection.  Make sure your agent includes a home inspection contingency in your offer to buy a home. If you’re unsatisfied with anything found in the home inspection, have your agent negotiate with the seller to make repairs, pay for repairs or lower the price.

8. Make it to closing.  You have your financing, your offer has been accepted, and you’re anxiously awaiting the day you close on your home.  Now, you just have to make sure you don’t do anything to jeopardize your credit.  Do not change jobs, buy a new car or apply for credit cards.

9. Celebrate.  Congratulations!  You’re now the proud owner of your first home.

Buying your first home can be exciting, especially if you’re knowledgeable about the process and prepared.

If your goal for this year is to be a first-time homeowner, let me guide you through the process of finding and buying a home.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Attorney  
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

You already know all the usual reasons agents and other experts think now is a good time to buy real estate in Southeast Michigan.  Here are 4 reasons to buy real estate in Southeast Michigan now that just might surprise you:

1. Homes are in tip-top condition. Instead of selling and moving into a more expensive home, many owners have invested their money in home maintenance, repair and updates, so says the Harvard University’s Joint Center for Housing Studies.

2. Outstanding homes are coming on the market. Many homeowners who have been waiting for the real estate market to take an upturn are now putting their homes on the market.  And, those homes are in great shape (see #1).

3. Appraisals reflect reality. We can all be thankful that Fannie Mae adjusted its guidelines so that home appraisals can be more in alignment with today’s real estate market. That means more deals will make it all the way through to closing.

4. Housing programs. There are still programs to help people buy homes:

• Workforce Housing Programs encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates.
• American Dream Downpayment Initiative (ADDI) provides low-income first-time earners (single family: $44,400; family of four: $63,450) with a city loan equal to 6% of the purchase price or up to $10,000, whichever is greater. Each state receives ADDI funds proportionate to the percentage of the national total of low-income households residing in rental housing in the state, as determined by the most recent available U.S. Census data.
• Mortgage Credit Certificate Program is a federal tax credit (15% or 20% of the mortgage interest, depending on property location) that helps low and moderate earners qualify for a higher first mortgage and reduced federal income tax.

Talk with a mortgage specialist or real estate in Southeast Michigan professional to find out which programs your state has funded.

Now isn’t just a good time to buy, it’s one of the best times ever.  If you’re ready to buy a home, I can help.   Give me a call at 248-514-2640 or email me today at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Attorney
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

For some frustrated sellers, the answer to “Why isn’t my home selling?” is “It’s the agent’s fault!”  If your immediate instinct is to drop your Southeast Michigan real estate agent for a new one, you might want to take a deep breath and consider the following:

1. Do you think agents are like lottery tickets?  Going through Southeast Michigan real estate agents as fast as scratch-off lottery tickets isn’t going to get your home sold faster.  In fact, it usually slows down the process.

2. Is your home priced correctly?  That’s probably the number one difference between homes that sell fast and homes that sit on the market.  A poorly priced home could be your agent’s fault.  Then again, you could be partially to blame.  Did you insist on a specific price even though your agent strongly recommended a lower price?  Did you refuse to lower the price when your agent suggested lowering it?  If you’re inflexible about price, switching agents will not help. 

3. Did you make the home improvements recommended by your agent?  If your agent suggested you paint, clean carpets, reduce clutter or complete any other inexpensive, easy-to-accomplish task, and you didn’t do it, you’re greatly reducing your opportunity to get your home sold.  You chose to work with your agent because he is a knowledgeable professional.  Take his advice and get those home improvement tasks done now.

4. Has your listing agreement expired?  If your listing contract has expired, this is the perfect time to consider switching agents.  Go back to the start, identify 3 new agents and interview the agents.  If you find one that fits your needs better than your current agent, let your agent know you won’t be renewing your contract.

5. Did your agent market your home?  If your agent has not done all the marketing he promised, point this out and ask him when he’ll get the marketing in place.  Follow up to be sure it’s done on time and professionally.  If he still doesn’t market your home like he said he would, it may be time to switch agents. 

6. Are you being impatient?  If you made all the home improvements recommended by your agent, your home is properly priced, and all marketing tasks are completed, you may just need to have a little patience.  This is a slow real estate market.  That means your home isn’t going to sell overnight.  Ask your agent the average number of days it takes a home to sell in your area, then wait that length of time before thinking about changing agents.

Don’t replace your agent just because you don’t know what else to do.  You’ll be wasting time and effort.  Instead, work with your agent to determine what else can be done to get your home sold.

If you decide to search for a new Southeast Michigan real estate agent, I’d be honored if you’d allow me to interview for the job.  Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com to schedule an interview.

Lee Morof
Associate Broker/Attorney  
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com 
info@NorthWoodwardHomes.com
Call:  248-514-2640

If you’re hoping to sell your real estate in Southeast Michigan in 2011, make some New Year’s resolutions to help the process along.   Resolve to:

1. Interview and get a comparative marketing analysis (CMA) from at least three agents from three different real estate agencies in Southeast Michigan.  Each agent has a different opinion about the value of your home and how to best market your home.  Learn from each agent and then sign a contract with the agent you decide to hire. 

2. Research the number of foreclosures and short sales in your neighborhood.  To sell your home, find out how many foreclosures and short sales you’re competing against.  This impacts the value of your property as well as the length of time it takes you to sell.  Your real estate agent in Southeast Michigan can help you with this research.

3. Be realistic about price. After reviewing your three CMAs, talk with the agent you hired and come to an agreement on the price that can get your home sold.  Ideally, that price should be at or just below the selling price of similar houses in your neighborhood that have sold in the past 90 days.

4. Counter offers.  Be calm if a buyer suggests a lower price than you want. Don’t just snap his or her nose off. Consider your options.  Can you afford to let the house go at the offered price? If you can and still want to say no, think about it… how long did it take to get this potential buyer? Super low bids are not insults; they’re a buyer’s way of testing you.  So, even if an offer seems insulting low to you, counter it.  If the buyer wants your home, he or she will come up to a realistic price.

5. Remain flexible.  Make concessions where you can.  The buyer wants you to pay part of the closing costs?  That’s a great way to sweeten the deal.  Fix those small problems found in the home inspection.  Add on a home warranty.  A successful sale means everyone walks away happy. 

Put these resolutions into action, and your new year may turn out to be even happier than you expected!

If you’d like a proven 30-Day Marketing Plan to get your real estate in Southeast Michigan sold, give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com. You’ll also receive a free competitive marketing analysis.  

Lee Morof
Associate Broker/Attorney
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

Times change but not always for the best.  Consider the change we’ve seen in attitudes toward Southeast Michigan real estate over the last few decades. 

Owners used to love their homes because they were their safe havens.  Many now only worry about whether or not their houses will appreciate enough in value to allow them to refinance to buy luxury vacations in Hawaii or a new car.

What’s your stance on the Southeast Michigan real estate you own or wish to own some day?   Is it a house or a home to you?  There’s no right or wrong answer to this question, simply a varying point of view.

It’s a house if you:

• Bought it because you want to build equity 
• Value it most because of its monetary value
• Worry primarily about it because it might lose some of its value in today’s market
• Appreciate it if it gives you short term profit
• Like the neighborhood because it increases the market value of your property
• Plan to sell when you can make the biggest profit

It’s a home if you:

• Bought it because you want to build a happy life there
• Value it most because of its emotional value
• Worry primarily about it because without it you wouldn’t have a roof over your head
• Appreciate it if it gives you long term profit
• Like the neighborhood because of the people who live there
• Plan to sell when your lifestyle needs change

Personally, I’m nostalgic for the days when a house was called a home because of the love that was inside.

Whether you’re interested in buying Southeast Michigan real estate as an investment or a home, I can help you achieve your goals.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Attorney
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

Frequently, there are news stories that impact our Southeast Michigan real estate market.  Here are two I want to share with you this month:

Rising Interest Rates Could Get Buyers Moving

Rising interest rates may finally push Southeast Michigan real estate buyers off the fence and into the market.

In December, after President Obama agreed to extend tax cuts for two years, the financial markets  indicated this event would most likely push mortgage interest rates higher.

Analysts predict that buyers will move quickly when it looks like rates are going up and are unlikely to come down. “Once people see this might actually be the bottom, they’ll go for it,” says Paul Dales, U.S. economist at Capital Economics Ltd. 

For an example of interest rate increases, note what happened in December, 2010.  

• On December 2, the 30-year fixed interest rate hovered around 4.46 percent. 
• One week later, on December 9, it was up to 4.61 percent.
• When I checked on December 26, the 30-year fixed interest rate was up again to 4.875 percent.

National Foreclosure Rates Fall

Has the real estate market hit bottom?  One sign that it has is RealtyTrac’s report that foreclosures fell sharply in November.  RealtyTrac’s November, 2010, U.S. Foreclosure Market Report™ indicated a 21 percent decrease in foreclosure activity from the previous month and a 14 percent decrease from November, 2009.

According to RealtyTrac, a mortgage research firm, foreclosure activity decreased dramatically in November with fewer than 300,000 properties receiving a foreclosure notice for the first time since February, 2009.

While foreclosures typically decrease in November, and we’re sure to see a rebound in foreclosure activity, these statistics are not to be dismissed because they show the lowest level of foreclosure activity since November, 2008.  Additionally, both the 21 percent month-over-month decrease and 14 percent year-over-year decrease in foreclosure activity were the highest drops recorded since RealtyTrac began publishing the U.S. Foreclosure Report in January, 2005.

Want to know more about the Southeast Michigan real estate market?  Give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com to discuss our real estate market.  I look forward to hearing from you.

Lee Morof
Associate Broker/Attorney
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640